Major Insurers Running Billions of Dollars Behind on Payments to…


According to hospital authorities in various states, Anthem Blue Cross, the country’s second-largest health insurance company, is behind on billions of dollars in payments owed to hospitals and doctors due to onerous new reimbursement regulations, computer issues, and mishandled claims.

According to Molly Smith, group vice president of the American Hospital Association, Anthem, like other big insurers, is exploiting the covid-19 problem as cover to enact “egregious” rules that damage patients and squeeze hospital finances. “There’s a feeling that ‘everyone’s distracted.’ We’ll be able to get this done,’ she remarked.

According to the AHA, hospitals are also contending with an increase in UnitedHealthcare, the nation’s largest health insurer, retroactive claims denials for emergency department care.

Insurance and hospital disagreements are nothing new. However, more patients are caught in the middle of this battle, fearful of having to pay unpaid claims. Even after receiving tens of billions of dollars in emergency aid from the federal government, hospitals say it’s hurting their budgets as they deal with covid spikes.

Anthem representative Colin Manning said in an email that “we acknowledge there have been some problems” with timely reimbursements due to claims-processing changes and “a unique set of dynamics” during the pandemic. “We apologize for any trouble or delays this has caused.”

Insurers are required under Virginia law to pay claims within 40 days. VCU Health, a system that operates a big teaching hospital in Richmond linked with Virginia Commonwealth University, said Anthem owed it $385 million in a letter to state insurance regulators dated Sept. 24. According to VCU, more than 40% of the claims are older than 90 days.

Anthem’s late, underpaid claims total “hundreds of millions of dollars” for all Virginia hospitals, according to a June 23 letter to state regulators from the Virginia Hospital and Healthcare Association.

Payment delays across the country are “creating an intolerable situation,” according to an American Hospital Association letter to Anthem CEO Gail Boudreaux dated Sept. 9. “Patients face higher barriers to care; doctors are burning out on superfluous administrative duties; and the system is straining to fund the staff and supplies” required to combat COVD.

Anthem has received complaints “from sea to shining sea, from New Hampshire to California,” according to AHA CEO Rick Pollack.

On Anthem’s books, there are significant payment delays. According to regulatory records, 43 percent of the insurer’s medical expenditures for the quarter ended June 30, 2019, before the pandemic. Two years later, that proportion had climbed to 53 percent, a $2.5 billion difference.

Anthem made $4.6 billion in profits in 2020 and $3.5 billion in the first half of 2021.

When Alexis Thurber, who lives near Seattle, received a $18,192 hospital bill in May for radiation therapy that doctors indicated was necessary to treat her breast cancer, she was covered by Anthem.

According to Thurber, Anthem argued the therapies were “experimental” and “not medically essential.” She spent the most of the summer attempting to get the insurance company to pay up, making two dozen phone calls, waiting on hold for hours, sending countless emails, and enduring unimaginable stress and concern. Months later, it finally paid up on the claim.

“It’s really heinous. It’s a game they’re playing,” Thurber, 51, who was diagnosed with cancer in November, said. “It was impossible to get genuine assistance.”

Anthem is unable to comment on Thurber’s case due to privacy laws, according to Anthem spokesperson Colin Manning.

Patients are left in the lurch when insurance fail to pay medical bills on time. They may first receive a notice stating that payment is pending or has been refused. They could be billed by a hospital for care they thought was covered. Patients whose insurance does not pay up are frequently sued by hospitals and doctors.

Anthem’s increased layers of document requirements, prior-authorization difficulties for common treatments, and mandates that doctors speak to insurance gatekeepers themselves — not support employees — are among the behaviors cited by hospitals as contributing to payment delays or denials. In their letter, the AHA stated, “This necessitates clinicians to practically leave the patient’s bedside to get on the phone with Anthem.”

Anthem frequently denies coverage for outpatient surgery, specialty pharmacy, and other services in in-network health systems, resulting in a “bait and switch” on Anthem members, according to AHA officials.

In an April letter to Empire Blue Cross, which is owned by Anthem, the Greater New York Hospital Association wrote, “Demanding that patients be treated outside of the hospital setting, against the advice of the patient’s in-network treating physician, appears to be motivated by a desire to drive up Empire’s profits.”

In a recent letter to the AHA, Anthem officials pushed back, claiming that the insurer’s new restrictions are meant to curb high rates charged by hospitals for specialty medications, non-emergency surgery, screening, and diagnostic tests.

The AHA said in its letter that severe problems with Anthem’s new claims management system surfaced months ago and “remain without meaningful improvement.”

Claims have gone missing in Anthem’s computers, and VCU Health has had to print and submit medical records to get paid, according to VCU’s letter. The cash shortage is causing a “unmanageable disruption” that threatens VCU’s financial stability, according to the university.

Emily Long was hit by a motorcycle in New York City in June, and United denied $31,557 in claims for her care. Her cheekbone was fractured, and she needed surgery to repair it. United said there was a lack of evidence for “medical necessity,” which Long described as a “extremely annoying” response on top of the accident’s misery.

According to United spokesperson Maria Gordon Shydlo, the Brooklyn hospital that treated Long was “paid appropriately under her plan and within the required time limit.” “The facility has the right to file an appeal.”

United’s unpaid claims were at 54 percent as of June 30, which was approximately the same as two years ago.

When Erin Conlisk, who resides in California, had problems getting permission for medical equipment for her elderly father this summer, United staff told her that the insurer’s entire prior-authorization database had been offline for weeks.

“In mid-July, there was a small hiccup with our prior-authorization process, which was promptly resolved,” Gordon Shydlo said.

When asked about the payment backlog by Wall Street analysts, Anthem officials said it was partly due to their decision to raise financial reserves during the health-care crisis.

On a conference call in July, John Gallina, the company’s chief financial officer, remarked, “Really a ton of uncertainty involved with this climate.” “In our approach, we’ve attempted to be really cautious and conservative.”

Hospitals have benefited from two massive funding injections during the pandemic. Through the CARES Act of 2020 and the American Rescue Plan of 2021, they and other medical providers have received more than $100 billion. Last year, United, Anthem, and other insurers increased hospital reimbursements by billions of dollars.

Many of the largest, wealthiest systems benefited from the federal funds, while poorer hospitals serving low-income patients and rural areas struggled.

According to hospital administrators, these are the systems that are now being harmed the most by insurer payment delays. According to Pollack, federal assistance payments “have been a lifeline, but they don’t make people whole in terms of the losses from increased expenses and lost revenue as a result of the covid experience.”

Several health systems either declined to comment or did not react to a reporter’s questions concerning claims-payment delays. According to Smith of the AHA, “there is a genuine dread of commenting on the record about your major commercial partner” among individual hospitals.

Alexis Thurber is concerned that she will have to pay her $18,192 radiation bill out of pocket, and she isn’t optimistic that her Anthem policy would cover the cost of her treatment better next time.

She stated, “It makes me not want to go to the doctor anymore.” “I’m afraid about getting another mammogram since you can’t trust them.”

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